Which of the Following Methods of Determining Bad Debt Expense

question 156

Multiple Choice

Which of the following methods of determining bad debt expense does not properly match expense and revenue?

• A) Charging bad debts with a percentage of sales under the allowance method.
• B) Charging bad debts with an amount derived from a percentage of accounts receivable under the allowance method.
• C) Charging bad debts with an amount derived from aging accounts receivable under the allowance method.
• D) Charging bad debts as accounts are written off as uncollectible.

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Definitions:

Oligopoly

The market structure that exists when there are very few businesses selling a product.

Economic Depression

A severe and prolonged downturn in economic activity characterized by significant decline in GDP, high unemployment, and deflation.